The Portland Development Commission has chosen a veteran venture capitalist and Portland business consultant to manage the Portland Seed Fund, an investment pool deploying $500,000 of city money to help launch startups.

The goal is to fund ideas at their earliest stage, cultivate young companies with mentorship as well as money, and then focus on the most promising businesses in conjunction with other investors.

"Invest early, invest small and triage quickly," said Jim Huston, formerly with Intel Capital, now a director with Blueprint Ventures. He will manage the Portland Seed Fund with startup consultant Angela Jackson in a newly formed company called JH Ventures.

Angela Jackson

Despite Oregon's large base of engineering talent and its proximity to tech hotbeds in the SanFrancisco Bay Area and Seattle, the state has long lagged the nation as a whole in raising money for startups.

Still, early-stage entrepreneurs complain that money remains hard to come by, a longstanding problem the city decided to take on directly after intense lobbying from Portland's startup community. Other municipalities, including New York City, are dabbling in similar projects.

Jim Huston

Portland's new seed fund managers will have a dual role. In addition to making investments, they're also charged with raising at least $500,000, and perhaps $1.5 million, to supplement the city's stake.

Some of that money may come from private investors and some may come from other economic development groups. The Portland Seed Fund will meet next month with managers of the Oregon Growth Account, which invests a portion of state retirement funds lottery proceeds, to discuss a possible collaboration.

The seed fund will not invest any money until it secures outside funds. Huston said he anticipates that will be complete by the end of Portland's fiscal year next June, and probably much sooner.

The Portland Development Commission, which launched the seed fund and provided the $500,000 to start it, has allocated an additional $20,000 to cover administrative and legal costs, according to Patrick Quinton, PDC business and industry manager,

Specifics of JH Ventures' compensation haven't been set, he said, but there will be little available up front. Instead, he said, Jackson and Huston will probably receive a portion of whatever profits their investments produce, which is typical in the venture world.

Diane Fraiman, a Portland venture capitalist, served on the five-member volunteer board that chose JH Ventures. She said Jackson and Huston provided the best combination of experience and connections.

"They came to the table with the most competent, well-thought-out business plan of all the groups," she said. "Together, the two of them have a very good set of relationships in the Portland ecosystem."

Both Huston and Jackson have worked in the past with the Oregon Entrepreneurs Network, a not-for-profit group that promotes Oregon startups. Jackson said they intend to draw on OEN, as well as other entrepreneurial groups in the region, as they seek advice and funding and for their portfolio companies.

"We're going to be looking to the grassroots for deal sourcing and support," she said.

The PDC declined to say who else applied to manage the fund or to release JH Ventures' application. A public records request for the information is pending.

"I'm obviously disappointed that it wasn't us," said Friedman, who has launched startups himself and now helps run Nedspace, shared office space for entrepreneurs and a popular gathering site for Portland tech events.

Ultimately, Friedman said, he hopes to start his own fund to support the region's startups. For now, though, Friedman said he welcomes the city's fund and doesn't want to get in the way of an initiative he helped launch.

"We were successful doing that," Friedman said, "and that's the thing I think is most important."